It's a paradox for American cities, including ours. Just as demand for bus and train service soars – and just as big global forces like climate change, energy insecurity and a devastating recession require more public transportation — transit agencies are forced to offer less.

Metro Transit and other Twin Cities providers will come up at least $63 million short over the next two years in trying to operate their fleets of trains and buses. That's a shortfall of 7.5 percent despite a recent surge in riders and a string of fare increases that have raised the price of a basic bus trip by 50 percent since 2000.

There's more irony. Don't expect federal stimulus money to replenish the deficit. The Twin Cities will get $69 million for transit projects, but Washington's help is intended almost solely for capital purchases like new buses and train cars, not for keeping buses and trains running.

All of that leads to the prospect of riders waiting longer at stations, or seeing their routes canceled altogether, or having to pay higher fares at a time of economic hardship. It leads also to the prospect of transit layoffs — a kind of double whammy. People can't get to jobs because their bus driver doesn't have one.

Overflow crowd at hearing
State Sen. Scott Dibble, DFL-Minneapolis, hosted a subcommittee hearing Wednesday at the Hennepin County Government Center. An overflow crowd lined up to urge the Legislature to prevent another fare increase or cuts in service. That would send a lot of people from "difficulty to disaster," said Celeste Riley of Mendota Heights. Metro Transit last raised fares in 2001, 2003 and 2005.

Advocates for the homeless and disabled testified, as did those who see transit as symbolic of adapting to new times. "It seems like every time we take a step forward, we're forced to take two steps back," said Jennifer Munt of Minnetonka, president of the advocacy group Transit for Livable Communities.
 
A collapse in auto sales is the primary cause for the budget shortfall. Sales-tax receipts from motor vehicles currently pay for about 29 percent of transit's operations. But those receipts have nose-dived by nearly one-third since 2002.

Officials at the Metropolitan Council hope to fill the gap by shifting some of the federal stimulus money — mainly $30 million aimed at maintenance — to cover operations. Where the council would find another $33 million is uncertain, especially given Gov. Tim Pawlenty's opposition to new revenues.

Met Council to tap reserve funds
Met Council Chairman Peter Bell said Wednesday that he will tap reserve funds to fill part of the hole, and perhaps try to take $8 million over two years from Livable Communities grants — money set aside to promote efficient land development, often near transit stations.

Dibble, who chairs the Senate's Transit Subdivision, said he's wary of draining Livable Communities funds because of their importance in counteracting sprawl. He said, however, that the Legislature would look for ways to "flex" money from capital projects to operations, seeing as how the federal stimulus is geared toward new equipment.

Indeed, the bulk of the federal money would go toward building park-and-ride stations and buying new buses and rail cars for the Hiawatha and North Star lines. The Central Line, not yet "shovel ready," cannot qualify for stimulus help.

Although he's authorized to add 25 cents this year, Bell said he hopes to avoid a fare increase because it would hurt ridership. Bell described the budget situation as serious but not yet dire. Dire comes in 2012 and 2013, when the stimulus is gone and the auto sales-tax revenues are expected to decline further. "That's when I run out of arrows in the quiver," he said. It's clear, he added, that transit operations must find other sources either to replace or supplement the auto sales tax.

McLaughlin Hennepin County Commissioner Peter McLaughlin warned against poaching sales-tax revenues intended to build new transitways, like the Southwest LRT line and others. "We need to keep our momentum," he said.

Rybak advocates permanent fix
Minneapolis Mayor R.T. Rybak reminded the audience that gasoline prices are temporarily low, and that waking up to find rising gas prices and less transit "would be the worst of both worlds." He advocated a "permanent fix" for transit operations, even if it means more revenue.

The crisis in transit operations is part of a national trend, all due to falling local tax receipts. Washington, D.C. plans to cut service and eliminate 900 jobs to help solve a $176 million gap. Chicago was forced to raise fares despite the biggest rider gains in 30 years. New York City, with a $1.2 billion deficit, plans a 23 percent fare hike plus the elimination of two dozen bus routes and two subway lines. Boston, Atlanta and San Francisco are among other systems in trouble. St. Louis plans to idle 165 buses because it can't afford to run them.

Why the federal stimulus bill didn't include operations money is something of a mystery. The operating budgets of car companies were bailed out big time. Polly Trottenberg, director of Building America's Future, an infrastructure advocacy group, said the exclusion was part of  "a long-standing U.S. political and policy bias against major urban transit systems." (Small cities and rural areas can use stimulus money for transit operations.)

Twin Cities ridership rose impressively in 2008. Metro Transit delivered nearly 82 million rides, the most in 27 years. Ridership has risen by 17.8 percent over the last four years, although rising unemployment and cheaper gasoline prices began to erode monthly increases starting in December.

Local numbers match national trends. More than 10.3 billion transit trips were taken in 2007, the most in 50 years. The rate continued upward through most of 2008 as gasoline prices rose and car travel declined, although increases slackened late in the year.

Fares support about 30 percent of transit operations in the Twin Cities, a relatively high share of rider support among systems nationally.